Abstract

This paper suggests that Chandler's (Chandler, A.D., 1990. Scale and Scope: The Dynamics of Industrial Capitalism. Belknap Press of Harvard Univ. Press, Cambridge, MA.) organisational capabilities framework can be modified to explain how suppliers of complex product systems (CoPS) build the capabilities necessary to expand successfully into new lines of business. In addition to Chandler's functional and strategic capabilities, we propose the concept of ‘project capabilities’ to refer to important CoPS activities of bid preparation and project execution. An organisational learning cycle model is presented to show CoPS firms can move from the first bid or project of its kind in a new domain of business, to achieve what we call ‘economies of repetition’ by putting in place organisational changes, routines and learning processes to provide a growing number of similar bids and projects more efficiently and effectively.